Indian Rupee: Strengthens On Fresh Dollar Sales

The Indian rupee strengthened against the dollar in early trades on Tuesday, 03 April 2018, resuming trade after a holiday extended weekend. Rupee gained 9 paise to start at Rs 65.09 against the US dollar on fresh selling of the greenback by exporters. The dollar weakened against other global currencies as China imposed extra tariffs on US products, escalating a dispute between two of the worlds biggest economies, and supporting the domestic unit here.

The local unit was seen in a range of 65.06 and 65.13 so far during the day. In the spot currency market, the Indian unit was last seen trading at 65.0950. On Wednesday, the rupee had ended 21 paise lower at 65.18 against the US currency on fiscal deficit concerns. Forex market remained shut yesterday due to annual accounts closing. The market also remained shut on Thursday and Friday for Mahavir Jayanti and Good Friday, respectively.

A bout of volatility was seen in early trade as domestic stocks turned positive soon after a subdued start triggered by negative Asian stocks. At 9:27 IST, the barometer index, the S&P BSE Sensex, was up 50.50 points or 0.15% at 33,305.86. The Nifty 50 index was up 10.25 points or 0.10% at 10,222.05. Overseas, Asian stocks declined as a sell-off in once much-favored US technology shares deepened and volatility soared. US stocks fell sharply yesterday, 2 April 2018 driven by both uncertainty surrounding trade policy and weakness in the large-capitalization technology and internet sectors.

Meanwhile, the dollar traded slightly lower on Tuesday morning in Asia amid the escalating trade tensions between the U.S. and China. Risk aversion resulted from fears of a full-blown trade war between the worlds two largest economies sent the safe-haven yen higher. The Non-Farm Payrolls results are also investors focus this week. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 89.66 at 11:27PM ET (03:27 GMT), down 0.03%, extending its losses from an overnight high at 89.78.